The tourism generates a major contribution to UK economy. It generated about Â£85 billion offering 3.5 percent to national GDP. About two million jobs are maintained by the tourism industry in which 1.4 million are directly employed in the sector with five percent of UK employment.
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The tourism industry of UK has considerably reduced in the past ten years drastically. The closing stages of the provisional VAT reduction that took place in January 2010 are expected to negatively influence the UK tourism industry completely. Even though the return of the VAT rate to 17.5% will not have a specific unfavorable effect on lodging providers and tourist attractions, it is bounce to minimize the competitiveness of U.K based on the recent measures collected in Europe. For example, consider France lowered the VAT rate for restaurants from 19.6% to 5.5% and hence Germany proclaimed that it will lessen its VAT rate on lodging from 19% to 7% in January. Most of the reports suggested that the tax rate is more when compared to other destinations. Hence, it shows that the visitors to U.K face higher prices that generate the country to be less competitive. Moreover, the lower rate would support savings in the sector that could knock over the turn down in the Balance of Payments and add up to Â£1.6 bn in the first year in the consecutive years. On an average of the assessment of VAT rates in some crest rival tourist destinations such as France, Spain, Italy, the US and Australia revealed that the visitors of U.K will compensate about 10% more on housing and restaurants and 3.5 % extra on appeals and remaining items than they would in any of those substitute countries. A vat rate of 17.5% places the UK tourism sector at an apparent upgrading in the forceful comprehensive tourism market. In this connection, this research aims at evaluating the impact of VAT increase in the tourism industry of U.K in the year 2011.
The important aim of this research is to evaluate the impact of VAT (Value added Tax) increase on Tourism industry of U.K in the year 2011.
To understand about the effectiveness of tourism taxation in U.K To analyze the trends and issues of U.K tourism To understand the economic effects of changing VAT rates on the U.K tourism industry To conduct a primary research evaluating the impact of VAT (Value added Tax) increase on Tourism industry in 2011. To analyze the results of the primary research
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